Golden Seeds Presentation

Deborah Weinswig
Managing Director of Fung Global Retail & Technology
deborahweinswig@fung1937.com
US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016
March 23, 2016

FUNG GLOBAL RETAIL & TECHNOLOGY GOLDEN SEEDS MARCH 23, 2016 2
ABOUT THE FUNG GROUP
ABOUT FUNG GLOBAL RETAIL & TECHNOLOGY
MACRO AND RETAIL LANDSCAPE OVERVIEW
24 DISRUPTORS
AGENDA

24 DISRUPTORS
AGENDA

TRADING LOGISTIC
S
DISTRIBUTIO
N
RETAILING
Li & Fung Limited
Listed on SEHK
Global Brands Group
Listed on SEHK
Fung Retailing Limited
Privately Held Entity
Convenience Retail
Asia Limited
Listed on SEHK
Trinity Limited
Listed on SEHK
Branded Lifestyle Holdings Limited
LiFung Kids (Holdings) Limited
Toyrs “R” Us (Asia)
Suhyang Networks
UCCAL Fashion Group
Privately Held Entities
Fung Holdings (1937) Ltd.
A privately held entity and major shareholder of the Fung Group
ABOUT FUNG GROUP

24 DISRUPTORS
AGENDA

• The knowledge bank for the Fung Group
• Focuses on emerging retail and tech trends, specializing in retail and
technology, intersections, and building collaborative communities
• Based in New York, London and Hong Kong
• Publishes thematic and global market research on topics such as the
Internet of Things, digital payments, omnichannel retail, luxury and fashion
trends and disruptive technologies.
FUNG GLOBAL RETAIL & TECHNOLOGY

• Fung Global Retail & Technology advises retailers, real estate developers and tech companies on projects situated at the
intersection of retail, tech and/or fashion
• Our team offers a robust knowledge bank and significant experience in the retail, fashion and tech fields. We are involved in many
areas of the business and believe this allows us to offer a unique perspective by focusing on the future and where the sector is
heading
A UNIQUE COMBINATION OF RETAIL, FASHION AND TECH
OUR EXPERTISE
FASHION TECHRETAIL

• Global macroeconomic trends
• Demographic trends
(milennials vs boomers vs silvers)
• Retail sales
• Same store sales
• Square footage/real estate analysis
• Travel retail
• Market share analysis by category
• Inventory analysis
• Margin dissection and analysis
• Expertise in subsectors of retail,
including fast fashion, e-commerce,
department stores, specialty stores,
off-price and home improvement
• Experience following the tech space
across hardware and software
• Partner and mentor accelerators and
startups in retail and tech
• Coverage includes North America, Latin
America, Europe, the Middle East and
Asia
• Offices in New York, London and
Hong Kong
• The Fung Retail & Technology team
includes 20 analysts, each specialized in
specific areas of the world, working
together to offer a global perspective
• We leverage the Fung Group’s
participation in 40 markets around
the world
• We have industry contacts in the U.S.,
Europe and Asia
A DIFFERENTIATED PERSPECTIVE
A BROAD KNOWLEDGE BASE COMBINED WITH SPECIALIZED EXPERTISE AND OUR GLOBAL NETWORK
Broad Knowledge Base Specialized Expertise Global Network

COMPREHENSIVE RESOURCES
RESEARCH PROCESS
RESEARC
H
Contacts
News
Databases
On the
Ground
Partners
Internal
• Fung colleagues
• L&F colleagues in the
US, Europe and Asia
• Planalytics
• RetailNext
• Prosper Analytics • Bloomberg
• S&P Capital IQ
• Euromonitor International
• Haver Analytics
• Statista
• Analyst days
• Industry conferences
• Store tours
• Financial reports
• Financial and industry news
• Finance
• Retail
• Tech

ENTREPRENEURS
ROUNDTABLE
ACCELERATOR
OUR PARTNERSHIPS WITH ACCELERATORS

• Warehouse Clubs
• Department Stores
• Discount Stores
• Drug Stores / Pharmacy
• Consumer Electronics Stores
• Home Improvement
• Hypermarkets/Supercenters
• Supermarkets
• Specialty Retailers
• E-commerce Retailers
• Convenience Stores
• Global Retail Market
• Global Consumer Economics
• Emerging Retail Technologies
• New Retail Business Models
• Retail Channel Studies
• Startups, Accelerators in Retail
• Retail Real Estate
• Retail Business Strategy
• Disruptive Technologies
• Future Proofing
• North America
• Europe
• Latin America
• Asia Pacific
• Middle East and North Africa
OUR RESEARCH PROCESS
BROAD COVERAGE
Sector Coverage Thematic Coverage Geographic Coverage

24 DISRUPTORS
AGENDA

US: SHOWS CONTINUOUS IMPROVEMENT
Weak consumer sentiment reflecting lower expectations for growth
Strong vehicle
sales and
housing
starts
Unemployment
rate fell to 4.9%
in February
Low gas price
stimulates
consumer
spending
Consumer
sentiment index
dropped
from 93.0 in 2015
to 90.0 in 2016

US: SHOWS CONTINUOUS IMPROVEMENT
Major Economic Indicators
Indicator 2016 2015 YoY Change Meaning
Unemployment Rate 4.9% 5.5% (60) bps
The S&P/Case-Shiller 20-City Composite Home Price
Index
N/A 184.2 5.8%
Housing Starts (Mil.) 1.2 0.90 30.9%
Total Vehicle Sales (Mil. Units) 17.9 16.8 6.5%
Gas Price (USD/Gal.) $1.94 $2.35 (18.8)%
Savings Rate 5.2% 5.3% (10) bps
University of Michigan Consumer Sentiment Index 90.0 93.0 (3.2)%
CPI: Apparel Prices 127.5 126.4 (0.9)%
Sources: Bureau of Labor Statistics, US Census Bureau, St. Louis Fed, University of Michigan, US Energy Information Administration

CONSUMERS PREFER DINING OUT
Spending at restaurants and bars outpaced grocery stores for the first time in 2015
Source: US Census Bureau, data in billions USD
0%
5%
10%
15%
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Grocery Dining Out
Groceries and Dining Out as a Percentage of Total PCE
$15
$33
$52
$70
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Grocery Stores Dining Out
Spending at Grocery Stores vs. Dining Out
Source: US Census Bureau, data in billions USD

US: BUDGET & INTERNET SHOPPING DRIVE RETAIL GROWTH
BRICK & MORTAR:
Traffic continues to drop Digital influence
continues to grow
ONLINE:
DEPT STORES
& BIG BOX
RETAILERS
Face price
competition
OFFICE-PRICE
RETAILERS &
FAST FASHION
RETAILERS
Ride the off-
price/value boom
Led the group of top 19 apparel
companies with growth of 26%
in 2015
Source: Company Reports
ANNUAL SALES GROWTH
BY COMPANY – 2015

In contrast to biggest US retailers, a number of European apparel names continue to see striking success
EUROPE: STRONG PERFORMANCE CONTINUES
• These factors underpin global expansion opportunities
• Plus, European shoppers remain more willing to spend on apparel than US
shoppers; and a European economic recovery
+15.4%
FY15
+17.7%
FY15
(+9% in local currencies)
+8%
1Q16
Why?
Implications
More fashionable products
Better stores

FASTEST GROWING EUROPEAN RETAILERS NOW AND
THEN
Retailer
2005
Total
Revenue
(Millions)
5 Year
Retail
Sales
CAGR%
Baugur Group 12,549 106.2%
Dirk Rossmann GmbH 3,363 28.3%
WM Morrison Supermarkets Plc 21,840 28.1%
Mercadona, S.A. 11,958 25.2%
Inditex S.A 8,250 22.1%
Phones4U 2,754 18.9%
The Carphone Warehouse Group PLC 2,821 18.3%
Luxottica Group 4,108 18.0%
Musgrave Group 5,417 16.7%
Next plc 5,325 15.3%
Retailer
2014 Total
Revenue
(Millions)
5 Year
Retail Sales
CAGR%
Axel Johnson AB 9,733 49.3%
Jumbo Groep Holding 7,269 30.1%
PRADA Group 4,662 24.6%
Compagnie Financiere Richemont 13,217 17.9%
Hermes 5,475 17.6%
Primark 21,447 16.4%
Sports Direct International 4,529 15.6%
LVMH 40,727 14.6%
Casino Guichard-Perrachon 64,462 13.1%
HTM-Group 3,714 13.1%
Source: NRF, Deloitte, Company Reports

FASTEST GROWING US RETAILERS NOW AND THEN
Retailer
2005 Total
Revenue (Millions)
5 Year Retail
Sales CAGR%
GameStop 3,092 37.5%
Amazon.com 8,490 25.2%
Dick’s Sporting Goods 2,625 24.1%
Wawa, Inc. 2,790 23.8%
Pathmark Stores, Inc. 3,977 21.6%
Whole Foods Market, Inc. 4,701 20.7%
Bed Bath and Beyond 5,810 19.4%
Lowe’s 43,243 18.2%
Abercrombie & Fitch 2,785 17.6%
Kohl’s 13,402 16.9%
Retailer
2014 Total
Revenue (Millions)
5 Year Retail
Sales CAGR%
Albertsons Companies 27,199 45.3%
Southeastern Grocers 11,500 36%
Apple 182,795 26.4%
Ascena Retail Group 4,791 26.2%
Amazon.com 88,988 25.8%
Under Armour 3,084 23.7%
Nike 30,601 21.8%
Forever 21 4,500 14.3%
Advance Auto Parts 9,844 12.7%
Whole Foods Market 14,194 12.1%

FASTEST GROWING ASIAN RETAILERS NOW AND THEN
Retailer
2005 Total
Revenue
(Millions)
5 Year
Retail Sales
CAGR%
Kintetsu Department Store Japan $2691
Tokyu Corporation Japan $6,002
AS Watson & Company Ltd. Hong Kong $11,416
GS Retail Co Ltd. S. Korea $2,936
Yamada Denki Co., Ltd. Japan $11,363
Shinsegae Co., Ltd. S. Korea $7,352
Bic Camera, Inc. Japan $4,046
Beisia Group Hong Kong $6,505.32
AEON Co., Ltd. Japan $13,529.15
Lotte Shopping Co., Ltd S. Korea $8,005
Retailer
2014 Total
Revenue
(Millions)
5 Year
Retail Sales
CAGR%
Vipshop China $3,701.18
JD.COM China $17,671.82
Yonghui Superstores China $5,719.18
Chongqing Department Stores China $4,712.00
CP ALL Public Company Thailand $11,436.07
China Resources Enterprise Hong Kong $14,110.28
Chow Tai Fook Jewelry Group Hong Kong $8,285.28
Central Group Thailand $6,800.00
Belle International Hong Kong $6,505.32
Fast Retailing Co. Ltd. Japan $13,529.15

24 DISRUPTORS
AGENDA

1. Millennials Are Becoming The Trend Setter For The Consumer Market
2. Home Furnishings Market Disrupted By E-commerce
3. ACTIVE PURSUIT For Healthy Eating Lift Organic Grocers’ Sales
4. Last-mile Delivery Drives Online Grocery Sales
5. Ready-to-cook / Eat Economy Gains Popularity
6. Millennials Aspire To CAR OWNERSHIP But Also Like Sharing PLANS
7. Experiences Trump “Things”
8. Caring Economy Promotes Startups For Social Good
9. Subscription Economy Is Nibbling Away At Traditional Retailers’ Sales
10. Silver Economy: Aging Population Creates An Opportunity
11. Apps Become The Primary Way Of Communication
12. Social Shopping Is Made Simpler
LIST OF DISRUPTORS
13. Mobile Aggregators Create A One-stop Shopping Cart
14. Influencer Marketing Word-of-mouth Marketing Gains Upthrust
15. SEARCH Engines Seek OPPORTUNITIES IN RETAIL
16. Retail Store Closings And Openings Continue
17. Experiential Retail Brings Shoppers Back To Stores
18. Smart Malls: Reshaping The Physical Shopping Experience
19. Evolving Pure Plays
20. Online Fashion Resale Marketplaces Show Explosive Growth
21. E-commerce Disruptors In High-end Market
22. AMAZON LEADS FASHION Apparel Market
23. A Tale Of Two Retailers: Innovation Drives Growth
24. The Fall Of Disruptors: DEATH OF THE UNICORN?

• 80 million in US, biggest demographic group
• $1.3 Trillion buying power in US (BCG)
• Nearly half of workforce by 2020
• 5/6 Millennials in the US connect with companies on
social media (SDL)
• Millennials are more into access over ownership-
“The Renter Generation”
MILLENNIALS ARE BECOMING THE TREND SETTER FOR THE
CONSUMER MARKET1
Source: Pew Research Center
31% 34%
49%
34%
18%
29%
2% 2%
1%
1995 Q1 2015
Boomers
Gen Xers
Millennials
Post-Millennials
SilentsGreatest

• Founded in 2009, Houzz is aiming to disrupt the home
furnishings space
• Houzz is an online home-remodeling community that
connects homeowners with design inspirations and
home professionals
• Its business model is driven by community, content and
commerce
• Houzz has already attracted 35 million users across
200 countries
2HOME FURNISHINGS MARKET DISRUPTED BY E-
COMMERCE

COMMERCE
+15%
+20%
+44%
Source: Company Report

COMMERCE
• Startups like CIMAGINE are appealing to millennials’ tech
savviness with augmented reality to visualize furniture products in
their space

• Millennials believe that eating right
is the most important aspect to achieving
well-being
• Millennials are more concerned
with nutrition food labels regularly
3ACTIVE PURSUIT FOR HEALTHY EATING LIFT ORGANIC
GROCERS’ SALES
Millennials Boomersversus
24% 12%
Exercise and
Eating Healthy
40% 33%
Artificial Ingredients
Source: Company Report

• Multi-cultural cuisines
• Gluten-free baked goods
• Organics
• Avoid additives
• Less swayed by traditional nutritional markers such as calorie
count and health claims
• Buy frozen or prepared ‘healthy’ foods, adding fresh ingredients
and seasonings
• In 2015, Whole Foods Market revealed perhaps the first major
millennial-focused store format
• Prepared food departments are cooking to order, offering greater
variety, and healthier customized meals
3ACTIVE PURSUIT FOR HEALTHY EATING LIFT ORGANIC
GROCERS’ SALES

4LAST-MILE DELIVERY DRIVES ONLINE GROCERY SALES
The on-demand economy has driven growth of delivery
start-ups that provide innovative ways for consumers to ship or receive goods
Company
Latest Funding
Round
curbside $25 Million
deliv $28 Million
Doordash $40 Million
drizly $13Million
Instacart $220 Million
munchery $85 Million
nestdrop $150K
postmates $80 Million
roadie $10 Million
shyp $50 Million

Disruptors: Blue Apron, Munchery, Plated,
HelloFresh
• Blue Apron was the fastest-growing US e-tailer
in 2014, with sales growing 550%, to $65 million
• Healthier and cheaper than eating out
and takeout
• Convenience: ready-to-cook boxes and curated
grocery according to menus,
delivered to your doorstep
• US food market
• $1.2 trillion, with $600 billion in restaurants
• Millennial focused
5READY-TO-COOK / EAT ECONOMY GAINS POPULARITY
Up
300%
2015
Source: Forbes

• A recent survey found that 20% of Millennials take public transit
once a week or more, compared with just 7% of Generation Xers
and 10% of Baby Boomers
• 35% of millennials indicated that they plan to purchase a vehicle
in the next 12 months compared to 25% of total U.S. adults.
• Millennials lease more than any other generation and are leasing
50% more often today than they were five years ago
6MILLENNIALS ASPIRE TO CAR OWNERSHIP BUT ALSO
LIKE SHARING PLANS

• More than 3 in 4 millennials would choose to spend
money on a desirable experience
• 60% of Millennials have shared their experiences
online versus 34% of Gen Xers and 18% of Boomers
• Since 1987, the share of consumer spending on live
events has increased 70% largely on the back of
millennial spending.
7EXPERIENCES TRUMP “THINGS”

Disruptors: Gigzolo, Zaptravel, OpenTable, Beautified
• Consumers are spending less on apparel and more on
experience
• 78% of millennials prefer to spend money on an
experience rather than buying something desirable
• Gigzolo: curated network of musicians and DJs
available for hire for events
• Zaptravel:
• Digital travel agent
• Uses a semantic search engine to scroll through its
database
7EXPERIENCES TRUMP “THINGS”

Disruptors: TOMS, Reformation, Warby Parker,
NOURI, SoapBox Soaps, Zady, GoodXChange
• Social activism over self-indulgence
• Consumers, especially Gen Z, are
increasingly demanding integrity from brands
and retailers
• Startups for social good apply market-based
strategies to achieve a social goal
• TOMS, the shoe company, has a “one for
one” business model
• Reformation designs and manufactures
sustainable apparel, sourcing sustainable
fabrics and vintage garments
8CARING ECONOMY PROMOTES STARTUPS
FOR SOCIAL GOOD

SUBSCRIPTION ECONOMY IS NIBBLING AWAY AT
TRADITIONAL RETAILERS’ SALES
Disruptors: Le Tote, Birchbox, BarkBox, Pijon, Stitch
Fix
• Convenience and curated products for consumers
• Recurring revenue model for retailers
• Element of self-gifting
• Beauty is the biggest category
• Fashion styling subscriptions are becoming popular
9

SILVER ECONOMY: AGING POPULATION CREATES AN
OPPORTUNITY
• Senior population is growing across the globe
• US has the largest market for seniors: 2.2 trillion in 2014
• Older Consumers Are Increasingly Digitally Connected:
Increasing mobile device usage: Greatcall
• Boom of healthcare tech industry: UnaliWear
• Smart Home: healthcare and assisted living system
Source: UN Department of Economic and Social Affairs
10
7 10 15
12.3%
13.5%
16.5%17.0%
19.0%
23.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0
2
4
6
8
10
12
14
16
2015 2020 2030
Estimated Senior Population and Spending, 2020 & 2030
Consumer spending by senior population(USD trillion)
Senior population as a % of total population
% of total worldwide spending

APPS BECOME THE PRIMARY WAY OF COMMUNICATION
57%
53%
45%
37%37%
29%
27%
22%
19%
LINEFacebook
Messenger
SnapchatWhatsAppWeChatViberSkypeVineKakaotalk
Source: Globalwebindex as of Q1 2015
Messenger App User Growth YoY%11

App Millions of Monthly Active Users
WhatsApp 900 million
QQ Mobile 860 million
FB Messenger 800 million
WeChat 650 million
Skype 300 million
Viber 249 million
LINE 212 million
Snapchat 100 million
APPS BECOME THE PRIMARY WAY OF COMMUNICATION
11
Source: Globalwebindex as of Q1 2015

12SOCIAL SHOPPING IS MADE SIMPLER
• Buy on social media platforms without switch apps or
websites
• Easy to curate content on social media
• “Buy button” helps prevent shopping cart
abandonment
• Youtube, Pinterest , Twitter and Google already have
buy buttons
• Wechat is a pioneer in social shopping
45%
44%
30%
25%
22%
20%
16%
Reading reviews, comments and feedback
Receiving promotional offerings
Viewing advertisements
Staying on top of current fashion and product
trends
Writing reviews, comments and feedback
Associating with particular brands and retailers
Purchasing products directly via a social media
channel
How Social Media Influences Shopping Behavior
Source:PWC

13 MOBILE AGGREGATORS CREATE
A ONE-STOP SHOPPING CART
• Aggregate and curate online content
• Attempting to create a universal shopping cart
• The Keep app allows shoppers to buy products from any online stores
and check out from one single cart on Keep
• Shopspring.com: shop over 800 brands from one location, purchasing
directly from the brand

14 INFLUENCER MARKETING WORD-OF-MOUTH MARKETING
GAINS UPTHRUST
• Brand influencers: advocates on social media platforms and
review sites to support brands they love
• Influencer marketing:
- 81% of marketers found IM effective in 2015
- 59% of marketers will increase IM budgets in 2016
• Influencer marketing agency is now a booming industry
• Each month over 50 million people watch over 1.6 billion
minutes of fashion and beauty videos in more than 45,000
YouTube channels
• E-Marketer: YouTube has the highest ROI on
influencer marketing
Social Media Users in Jan. 2016
Facebook 1.5 billion
YouTube 1 billion
Instagram 400 million
Twitter 320 million
Snapchat 200 million
Pinterest 100 million
Sources: Statista

14 INFLUENCER MARKETING WORD-OF-MOUTH MARKETING
GAINS UPTHRUST
Target collaborates with
Joy Cho, a popular designer and
blogger. They also launched Oh Joy
for Target collection, an exclusive
party-inspired Home line
Emily Schuman a much-followed
fashion blogger, author and designer
launched her Cupcakes and
Cashmere collection in collaboration
with Nordstrom
Blogger star and entrepreneur
Michelle Phan launched her
own makeup line, Em, with
L’Oreal

15 SEARCH ENGINES SEEK OPPORTUNITIES IN RETAIL
Who They Are Biggest search engine in China Most popular search engine in the world
Public Company
Listed on NASDAQ
Shell company in Cayman Island
Listed on NASDAQ
Pay-per-click Marketing Baidu Tuiguang Google AdWords
Third-Party Payment Baidu Wallet Google Wallet
E-commerce Business Baidu Mall Google Shopping

15 SEARCH ENGINES SEEK OPPORTUNITIES IN RETAIL
Online Search
• Chinese market focused
• 82% of China online search queries
• 1% of global searches share
• Expanding globally
• 90% share of global searches
• 10% share in China
Mobile Search
• 80% of China’s mobile search market
• In Dec 2015, mobile search users reached 657million. 21%
YoY increase
• A starter in mobile search: early collaboration with Android
operating system
• 78% of global mobile search market share;
1% in China
Online Marketing
• Revenue was $9.9 billion, 96% of
total revenue
• 1,049,000 active online marketing customers
in 2015
• Advertising revenue reached $67.35 billion in 2015
• 90% of total revenue
Third-Party
Payment
• Limited Presence: Market Share: Alipay: 61.9%; Tenpay:
14.5%; Baidu Wallet: 2.3%
• Rapid expansion: reached 53 million in 4Q15; 180% YoY
• Google’s payment (Android Pay/ Google Wallet) is stronger
than Baidu wallet
• Paypal accounted for 78% of the
digital payment
• Apple and Google compete for the 2nd
E-commerce
• Dominance of Alibaba group(Tmall, Taobao)
• Baidu Mall (2015): sell foreign branded and imported goods to
middle and high-end consumers
• “Top Revenue Vertical”
• Google shopping vs. Amazon: shoppers directly click into the
Amazon website that diverts Google search traffic away

16RETAIL STORE CLOSINGS AND OPENINGS CONTINUE
Retailer # of Announced Store Closings
Walmart 269
Mens’ Wearhouse 250
Sports Authority 140
Sears 50
Macy’s 40
Kohl’s 18
Retailer # of Announced Store Openings
Dollar General 900
Forever 21 600
Under Armour 200
Dick's Sporting Goods 135-150
Ulta 100
ALDI 45
Costco 32
Dollar Tree 13
Stein Mart 12
Target 11
Source: ICSC Research and PNC Research
2015
• There was a 7% increase YoY in store closure
announcements
• There was 29% less square footage associated with
announced store closures in 2015 versus 2014
2016
• Off-price/discount retailers are expected to see major
growth in 2016
• Foreign discount grocers Aldi and Lidl plan to push US
expansion
• E-commerce pure plays opening stores

17EXPERIENTIAL RETAIL BRINGS SHOPPERS BACK TO
STORES
Urban Outfitters acquired
Vetri Family group of restaurants
in 2015
Club Monaco and Kohl’s are also
opening food and beverage shops in
their stores
Rebecca Minkoff offers interactive
mirrors as well as virtual reality headsets
Tommy Hilfiger stores have virtual
reality headsets to allow consumers to
experience runway shows
Lowe’s Holoroom allows customers to
see merchandise in different color
combinations and as they would appear
in a home
Proliferation of mobile apps to improve
in-store experiences,
such as: customizable shopping lists,
location-relevant promotions, and
product and inventory information
Food &
Beverages
Virtual
Reality Technology

Data enabled
personalized and
timely promotions
Track movements,
behavior and
preferences
Beacon enabled
location-based
advertising
SMART MALLS: RESHAPING THE
PHYSICAL SHOPPING EXPERIENCE18

• HGTV partnered with Macerich shopping malls to launch virtual and
hand-on technology-based experiences
4
8
• RetailNext formed strategic alliance with StepsAway, an in-mall
mobile retail solution provider offering shoppers smartphone access
to hyperlocal in-store deals
• A Silicon Valley-based unit which designs and experiments with
innovations to improve the retail experience
SMART MALLS: RESHAPING THE
PHYSICAL SHOPPING EXPERIENCE18

FUNG GLOBAL RETAIL & TECHNOLOGY GOLDEN SEEDS MARCH 23, 2016 49 4
9
AMAZON
BONOBOS
ATHLETA
CASPER
AYR
YOGIBO
HARRY’S INDOCHINO
EVOLVING PURE PLAYS
19

Millennials prefer mono-brand brick-and-mortar stores, and they shift
between online and offline along the shopping journey
5
0
Retailer # of Stores
1
2
3
20
26
EVOLVING PURE PLAYS
19

20 ONLINE FASHION RESALE MARKETPLACES
SHOW EXPLOSIVE GROWTH
Disruptors: thredUP, Tradesy, The RealReal, Poshmark,
Vestiaire Collective
• Online resale industry is worth $34 billion in the US
• Mobile is hot in resale; over 45% of thredUP’s sales come
from mobile devices
• Patagonia, Eileen Fisher and H&M launched resale programs
2011 2012 2013

20 ONLINE FASHION RESALE MARKETPLACES
SHOW EXPLOSIVE GROWTH
Disruptors: thredUP, Tradesy, The RealReal, Poshmark,
Vestiaire Collective
Why Online Resale Marketplaces Took Off
• Heavy venture capital investment in online
consignment industry (over $300 million)
• Retail brands’ resale programs encouraged
consumers’ sustainable consumption habits
• Consumers are convinced by great quality of
secondhand apparel bought via online platforms
• Societal shift toward less ownership—
the art of decluttering

21 E-COMMERCE DISRUPTORS IN HIGH-END MARKET
• High-end consignment jewelry
platform
• Merchandise, appraise,
photograph and serve
• Partnered with E-bay valet
• On-demand personal shopping and styling
subscription service
• Professional stylist bringing store inventory
directly to customers
• Quinn has a built-in style school that ensures
a talent pool
• Curates emerging artists
• “Democratize" the process of selling artwork
• Connecting artists directly with collectors

22 AMAZON LEADS FASHION APPAREL MARKET
• Winner: Amazon
led the group of top 19 apparel companies
with growth of 26% in 2015
• Runner Up: Fast Fashion
Top 5 include Inditex and H&M
• Declining Players:
Walmart’s apparel, Gap, Macy’s and Isetan
Mitsukoshi each posted sales declines for the
year
-5%
0%
5%
10%
15%
20%
25%
30%
Amazon
FastRetailing
Inditex
LVMH
H&M
RossStores
Hanesbrands
Nordstrom
TJXCompanies
JCPenney
RalphLauren
PVH
Target
Kohl's
VFCorp
Walmart
GapInc
Macy's
IsetanMitsukoshi
2015 Annual Sales Growth by Company

23A TALE OF TWO RETAILERS: INNOVATION DRIVES GROWTH
-20%
-10%
0%
10%
20%
30%
40%
50%
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
YoY Revenue Growth
UA ARO
$0
$20
$40
$60
$80
$100
$120
2009 2010 2011 2012 2013 2014 2015 2016
Historical Stock Prices
UA ARO

23A TALE OF TWO RETAILERS: INNOVATION DRIVES GROWTH
Under Armour is Innovative
• From sports clothing retailer to major player in
fitness technology
• Introduced UA Healthbox along with HTC
• Created “cognitive coaching system,” with IBM’s
Watson
• Teams up with influencers such as Dwayne
Johnson or Muhammed Ali to promote the
brand
Aeropostale is Stale
• Share prices have fallen close to 98% over the
past 5 year
• Considering strategic alternatives including a sale
or restructuring
• Failed to adapt to changing consumer tastes
• Failed to drop large logos and identify trends
• Missed the fast fashion boat

24THE FALL OF DISRUPTORS: DEATH OF THE UNICORN?
• 146 privately held startups with valuations of $1billion or
higher, or the “unicorns” in the US, 35 in China
• Gilt Groupe once valued at $1.1 billion, was sold at $250
million
• Good Technology, valued at $ 1billion, was sold at $425
million
• Square was valued at $6 billion when private. Market cap
at $3billion now
• Current market can’t absorb existing unicorns and they are
unwilling to go public
• At risk: Snapchat, Uber, Evernote, Vancl

Q&A
Deborah Weinswig
Managing Director of Fung Global Retail & Technology
deborahweinswig@fung1937.com
US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016
March 23, 2016

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